Last Week In Markets: Nov 07 - Nov 11 2022

In the US, October consumer prices increased 0.4% m/m and 7.7% y/y, below consensus expectations. Core consumer prices, which exclude food and energy, rose 0.3% m/m and 6.3% y/y—both also lower than market forecasts. We think Thursday’s market reaction to October’s inflation report is evidence that sentiment surrounding inflation, rather than the fast-rising prices themselves, has been the primary drag on stocks. There is little fundamental reason the report should spur stocks to jump more than 5%, yet it did—which we think speaks to how sour inflation-related sentiment is. The October inflation data were encouraging and we believe there are many signs inflation is likely to continue slowing, but we think it is premature to argue October’s inflation report confirms this. For more, please see our 11/10/2022 commentary, “October’s CPI and the Inflation Wall of Worry.”

In the eurozone, September retail sales rose 0.4% m/m—matching consensus estimates—but fell 0.6% y/y. In the UK, the first estimate of Q3 2022 GDP showed a 0.2% q/q contraction, less than forecast. Industrial production rose 0.2% m/m but fell 3.1% y/y in September, while manufacturing production increased 0.2% m/m and decreased 5.8 % y/y—all exceeding expectations.

In Japan, preliminary October money supply (M2) grew 3.1% y/y. October bank loans rose 2.7% y/y. In China, October consumer prices rose 2.1% y/y, lower than forecast. October money supply (M2) increased 11.8% y/y, below estimates. October imports and exports fell 0.7% y/y and 0.3% y/y, respectively, both falling short of expectations. 

The Week Ahead:

The US, UK, Japan and China report October retail sales. The UK, eurozone and Japan report October consumer prices. The eurozone and Japan release their second and first Q3 2022 GDP estimates, respectively. The eurozone and Japan announce September industrial production. Japan reports preliminary October trade data.

Source for all data cited is FactSet. This update constitutes the general views of Fisher Investments and should not be regarded as personalized investment advice. No assurances are made we will continue to hold these views, which may change at any time based on new information, analysis or reconsideration. In addition, no assurances are made regarding the accuracy of any forecast made herein. Global equities are represented by the MSCI World Index. The MSCI World Index measures the performance of selected stocks in 23 developed countries and is presented net of dividend withholding taxes and uses the maximum rate applicable to non-resident institutional investors who do not benefit from double taxation treaties. Past performance is no guarantee of future results. A risk of loss is involved with investments in stock markets.